SET YOUR SUBS UP FOR SUCCESS

Bringing other people into your one-person business is a big (but totally achievable) step. If you've decided to start working with subcontractors, most of your successes or struggles will come down to being operationally prepared. 

Subcontractor arrangements have a lot of moving parts. While real-time learning experiences are one of life’s inevitabilities, the more you think things through before you start onboarding, the more consistent and chaos-free the transition will probably be. A little planning now can save you from awkward conversations, cash flow headaches, and unnecessary stress later. Every business is different, but here are some important high-level considerations to address before you grow your team. 

How Will You Find the Right Subs? 

It’s important to confirm that any subcontractor you work with has the relevant knowledge and work experience, but fruitful working relationships take more than a specific set of technical skills. 

Especially when subcontractors are communicating with your clients and contributing to long-term projects, they are truly an extension of your business. Look for evidence that they’ll be reliable, responsive, and easy to collaborate with. 

One of the best ways to get a full picture of prospective subs is to ask for references within your freelance community. Ask colleagues about their own subcontracting experiences and prioritize candidates who come with trusted personal recommendations. 

If you believe you want to move forward with a sub, it’s smart to make time for an actual conversation. Grab coffee if you're local, or schedule a video call if you're not. You'll quickly get a feel for whether your communication styles align.

Can You Stay Profitable? 

Even if you have more available work than you can complete on your own, don’t simply assume that your margins can accommodate subcontractors. 

Start with your project budget. Determine the margin you need to make the project worthwhile, then calculate what remains for subcontractor costs. This will give you a realistic number to present before anyone commits to the work.

If a subcontractor's rate exceeds your budget, don't automatically absorb the difference. Instead, recalculate the project cost with your desired margin built in and present the updated price to the client. Sometimes they'll approve it. Sometimes they'll adjust the project scope instead. Whatever the case, it’s important to avoid slowly giving away your profit.

It's also worth resetting expectations around margins. If you're subcontracting specialized work, you probably won't earn the same percentage you would if you completed every task yourself. Sometimes leveraging niche talent places you in more of a project management role — and that’s ok. Accepting smaller margins for certain projects can be a strategic move when it helps you grow. 

What Will Your Payment Terms Look Like? 

Cash flow problems can sneak up on growing businesses. One of the easiest ways to accidentally create them is by paying subcontractors before your client has paid you.

Set expectations from the beginning. Your agreement with the client should clearly define when invoices are due, and your subcontractor agreement should explain that payment will be made after you've received payment.

Everyone likes to get paid as soon as possible, but managing expectations from the outset will prevent you from floating payments when clients are net 60 or net 90. 

When possible, consider mitigating the gaps by requesting an upfront deposit from the client. While this won’t always be possible, having money in hand before the work begins creates a financial cushion to cover early project expenses and reduce the pressure of waiting on final payment.

What Should Your Agreements Cover? 

Verbal agreements have a way of becoming fuzzy as projects grow in complexity. 

Every subcontracted project should include clear documentation outlining exactly what's expected. That includes the project scope, deliverables, deadlines, revision policies, payment amounts, and timelines.

Beyond the project itself, you'll also want a solid Independent Contractor Agreement (ICA) that governs the overall working relationship.

Your ICA can cover important details like:

• Ownership of completed work
• Confidentiality expectations
• Payment terms
• Communication expectations
• Independent contractor status
• Any other policies that apply across every project

Having these agreements in place protects both you and your subcontractors while reducing misunderstandings down the road.

How Will Onboarding Work?

Even very experienced freelancers need context. They'll produce better work and require less hand-holding if they understand your expectations and have easy access to everything they need to complete the project. 

A solid onboarding process should include:

• How to communicate with you and the client
• Your preferred project management tools
• Time tracking or invoicing requirements
• Brand guidelines or templates
• Standard operating procedures (SOPs)
• How feedback and revisions will be handled

If you expect subcontractors to work inside your project management system, use specific workflows, or follow particular approval processes, introduce those expectations before a project kicks off. 

Hiring subcontractors is a significant growth milestone, but a little structure upfront makes everyone more confident and helps projects run much more smoothly.